Boeing [BA] has agreed to pay a $51 million civil penalty to the U.S. government to resolve 199 arms export control violations, including technical data related to aircraft and missiles, the State Department said on Thursday.
The Charging Letter released by the State Department says that the violations include the downloading of files between 2013 and 2017 by three “foreign person employees” from China working from Boeing facilities in that country. The files were controlled under U.S. Munitions List categories and involved the F-18, F-15, and F-22 fighter aircraft, the E-3 Airborne Warning and Control System aircraft, AH-64 Apache attack helicopter, the AGM-84E Standoff Land Attack Missile, and AGM-121 Short Range Attack Missile II.
The State Department did not allege criminal conduct by Boeing and the violations did not involve classified materials. The company voluntarily disclosed the violations, most of which occurred before 2020.
The 36-month consent agreement suspends $24 million of the $51 million penalty as long as Boeing uses the money for remedial compliance measures. During the next two years, Boeing will work with an external compliance officer to oversee the consent agreement, which also requires two external audits of the company’s compliance with the International Traffic in Arms Regulations.
“We are committed to our trade control obligations, and we look forward to working with the State Department under the agreement announced today,” Boeing said in a statement. “As the agreement reflects, Boeing voluntarily and transparently disclosed all of the matters addressed in this resolution, the considerable majority of which predate the significant improvements we have made to our trade controls compliance program since 2020. We are committed to continuous improvement of that program, and the compliance undertakings reflected in this agreement will help us advance that objective.”
The charging letter also says that between 2013 and 2018 foreign-employees and contractors at company and partner facilities in 18 countries, which included Russia, Ukraine, Australia, Taiwan, Hong Kong, India, and others, downloaded ITAR-controlled data on 80 occasions.
“At the time of these unauthorized exports, Russia was subject to restrictive measures on defense exports per the Department of State public announcement on April 28, 2014,” the document says. It adds that “The U.S. Government also concluded that a certain unauthorized export to Russia created the potential for harm to U.S. national security.”
The letter also says that there were violations at Boeing subsidiaries in India related to technical data for next Air Force One aircraft, the VC-25B. In 2019, Boeing businesses in India also unlawfully transferred technical data of wiring diagrams for the C-17 transport aircraft, the CH-47 helicopter, and the E-7 airborne early warning and control aircraft.